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Decree No. 626
DECREE NO. 626
AMENDING CERTAIN ARTICLES OF PRESIDENTIAL DECREE NO. 442 ENTITLED
CODE OF THE PHILIPPINES."
HEREAS, Presidential Decree No. 570-A amends certain provisions of Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, and Presidential Decree No. 608 extends the effectivity of Title II of Book IV on Employees' Compensation and State Insurance Fund and Title III of Book IV on Medicare of the same Code to January 1, 1975;
WHEREAS, pending the effectivity of said Titles, the Social Security System, Government Service Insurance System, Philippine Medical Care Commission, and the Department of Labor have utilized the transition period for intensive study and consultations with labor organizations, employers' organizations, and civic, professional, and technical associations, representing the various sectors of the economy;
WHEREAS, as a result of such discussion and consultations, it has been found necessary to make adjustments in the text of the Labor Code to initiate, rationalize and coordinate the grant of benefits with the broad objectives of the Code consistent with the overriding priority of development;
NOW, THEREFORE, I, PRESIDENT FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines and pursuant to Proclamation No. 1081 dated September 21, 1972, as amended, do hereby order and decree:chanroblesvirtuallawlibrary
SECTION 1. Title II of Book IV on Employees' Compensation and State Insurance Fund of the Labor Code of the Philippines is hereby amended to read as follows:chanroblesvirtuallawlibrary
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND
POLICY AND DEFINITIONS
Art. 167. Definition
of terms. — As used in this Title unless the context indicates
a. "Code" means the Labor Code of the Philippines instituted under Presidential Decree numbered four hundred forty-two, as amended.
COVERAGE AND LIABILITY
Art. 169. Foreign employment. — The Commission shall ensure adequate coverage of Filipino employees employed abroad, subject to regulations as it may prescribe.
Art. 170. Effective date of coverage. — Compulsory coverage of the employer during the effectivity of this Title shall take effect on the first day of his operation, and that of the employee, on the date of his employment.
Art. 171. Registration. — Each employer and his employees shall register with the System in accordance with its regulations.
Art. 172. Limitation of liability. — The State Insurance Fund shall be liable for compensation to the employee or his dependents, except when the disability or death was occasioned by the employee's intoxication, willful intention to injure or kill himself or another, notorious negligence, or otherwise provided under this Title.
Art. 173. Extent of liability. — Unless otherwise provided, the liability of the State Insurance Fund under this title shall be exclusive and in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. The payment of compensation under this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic Act numbered eleven hundred sixty-one, as amended, Commonwealth Act numbered one hundred eighty-six, as amended, Republic Act numbered sixty-one hundred eleven, as amended, Republic Act numbered six hundred ten, as amended, Republic Act numbered forty-eight hundred sixty-four, as amended, and other laws whose benefits are administered by the System, or by other agencies of the government. (As amended by Sec. 2, P.D. 1921). chan robles virtual law library
Art. 174. Liability of third parties. — (a) When the disability or death is caused by circumstances creating a legal liability against a third party, the disabled employee or the dependents in case of his death shall be paid by the System under this Title. In case benefit is paid under this Title, the system shall be subrogated to the rights of the disabled employee or the dependents in case of his death, in accordance with the general law.
(b) Where the System recovers from such third party damages in excess of those paid or allowed under this Title, such excess shall be delivered to the disabled employee or other persons entitled hereto, after deducting the cost of proceedings and expenses of the System. (As amended by Sec. 17, P.D. 850).
Art. 175. Deprivation of benefits. — Except as otherwise provided under this Title, no contract, regulation or device whatsoever shall operate to deprive the employee or his dependents of any part of the income benefits, and medical or related services granted under this Title. Existing medical services being provided by the employer shall be maintained and continued to be enjoyed by their employees.
(b) The Vice Chairman of the Commission shall be alternated each year between the GSIS General Manager and the SSS Administrator. The presence of four Members shall constitute a quorum. Each member shall receive a per diem of two hundred pesos for every meeting that is actually attended by him, exclusive of actual, ordinary and necessary travel and representation expenses. In his absence, any Member may designate an official of the institution he serves on full-time basis as his representative to act in his behalf. (As amended by Sec. 2, P.D. 1368).
(c) The general conduct of the operations and management functions of the GSIS or SSS under this Title shall be vested in its respective chief executive officer, who shall be immediately responsible for carrying out the policies of the Commission.
(d) The Commission shall have the status and category of a government corporation, and it is hereby deemed attached to the Department of Labor for policy coordination and guidance. (As amended by Sec. 2, P.D. 1368).
ART. 177. Powers and duties. — The Commission shall have the following powers and duties:chanroblesvirtuallawlibrary
a. To assess and fix a rate of contribution from all employers;Art. 178. Management of funds. - All revenues collected by the System under this Title shall be deposited, invested, administered and disbursed in the same manner and under the same conditions, requirements and safeguards as provided by Republic Act numbered eleven hundred sixty-one, as amended, and Commonwealth Act numbered one hundred eighty-six, as amended, with regard to such other funds as are thereunder being paid to or collected by the SSS and GSIS, respectively: Provided, That the Commission, SSS and GSIS may disburse each year not more than twelve percent of the contributions and investment earnings collected for operational expenses, including occupational health and safety programs, incidental to the carrying out of this Title.
Art. 179. Investment of funds. – Provisions of existing laws to the contrary notwithstanding, all revenues as are not needed to meet current operational expenses under this Title shall be accumulated in a fund to be known as the State Insurance Fund, which shall be used exclusively for payment of the benefits under this Title, and no amount thereof shall be used for any other purpose. All amounts accruing to the State Insurance Fund, which is hereby established in the SSS and GSIS, respectively, shall be deposited with any authorized depository bank approved by the Commission, or invested with due and prudent regard for the liquidity needs of the System. (As amended by Sec. 4, P.D. 1368).
Art. 180. Settlement of claims. – The System shall have original and exclusive jurisdiction to settle any dispute arising from this Title with respect to coverage, entitlement to benefits, collection and payment of contributions and penalties thereon, or any other matter related thereto, subject to appeal to the Commission, which shall decide appealed cases within twenty working days from the submission of the evidence. chan robles virtual law library
Art. 181. Review. – Decisions, orders or resolutions of the Commission may be reviewed on certiorari by the Supreme Court on questions of law upon petition of an aggrieved party within ten days from notice thereof.
Art. 182. Enforcement of decisions. – (a) Any decision, order or resolution of the Commission shall become final and executory if no appeal is taken therefrom within ten days from notice thereof. All awards granted by the Commission in cases appealed from decisions of the System shall be effected within fifteen days from receipt of notice.
(b) In all other cases, decisions, orders and resolutions of the Commission which have become final and executory shall be enforced and executed in the same manner as decisions of the Court of First Instance, and the Commission shall have the power to issue to the city or provincial sheriff or to the sheriff whom it may appoint such writs of execution as may be necessary for the enforcement of such decisions, orders or resolutions, and any person who shall fail or refuse to comply therewith shall, upon application by the Commission, be punished by the proper court for contempt.
(b) The rate of contribution shall be reviewed periodically and, subject to the limitations herein provided, may be revised as the experience in risk, cost of administration, and actual or anticipated as well as unexpected losses, may require.
(c) Contributions under this Title shall be paid in their entirety by the employer and any contract or device for the deduction of any portion thereof from the wages or salaries of the employees shall be null and void.
(d) When a covered employee dies, becomes disabled or is separated from employment, his employer's obligation to pay the monthly contribution arising from that employment shall cease at the end of the month of contingency and during such months that he is not receiving wages or salary. chan robles virtual law library
Art. 184. Government guarantee. — The Republic of the Philippines guarantees the benefits prescribed under this Title, and accepts general responsibility for the solvency of the State Insurance Fund. In case of any deficiency, the same shall be covered by supplemental appropriation from the national government.
Art. 186. Liability. - The System shall have the authority to choose or order a change of physician, hospital or rehabilitation facility for the employee, and shall not be liable for compensation for any aggravation of the employee's injury or sickness resulting from unauthorized changes by the employee of medical services, appliances, supplies, hospitals, rehabilitation facilities or physicians.
Art. 187. Attending Physician. - Any physician attending an injured or sick employee shall comply with all the regulations of the System and submit reports in prescribed forms at such time as may be required concerning his condition or treatment. All medical information relevant to the particular injury or sickness shall on demand be made available to the employee or the System. No information developed in connection with treatment or examination for which compensation is sought shall be considered as privileged communication.
Art. 188. Refusal of examination or treatment. - If the employee unreasonably refuses to submit to medical examination or treatment, the System shall stop the payment of further compensation during such time as such refusal continues. What constitutes an unreasonable refusal shall be determined by the System which may on its own initiative determine the necessity, character and sufficiency of any medical services furnished or to be furnished.
Art. 189. Fees and other charges. — All fees and other charges for hospital services, medical care and appliances excluding professional fees shall not be higher than those prevailing in wards of hospitals for similar services to injured or sick persons in general and shall be subject to the regulations of the Commission. Professional fees shall only be appreciably higher than those prescribed under Republic Act numbered sixty-one hundred eleven, as amended, otherwise known as the Philippine Medical Care Act of 1969.
Art. 190. Rehabilitation services. — (a) The System shall, as soon as practicable, establish a continuing program for the rehabilitation of injured and handicapped employees, who shall be entitled to rehabilitation services, which shall consist of medical, surgical or hospital treatment, including appliances if they have been handicapped by the injury, to help them become physically independent.
(b) As soon as practicable, the System shall establish centers equipped and staffed to provide a balanced program of remedial treatment, vocational assessment and preparation designed to meet the individual needs of each handicapped employee to restore him to suitable employment, including assistance as may be within its resources to help each rehabilitee to develop his mental, vocational or social potential.
(b) The payment of such income benefit shall be in accordance with the regulations of the Commission. (As amended by Sec. 19, P.D. 850). chan robles virtual law library
Art. 192. Permanent total disability. — (a) Under such regulations as the Commission may approve, any employee under this Title who contracts sickness or sustains an injury resulting in his permanent total disability shall, for each month until his death, be paid by the System during such a disability, an amount equivalent to the monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with youngest and without substitution: Provided, That the monthly income benefit shall be the new amount of the monthly benefit for all covered pensioners, effective upon approval of this Decree.
(b) The monthly income benefit shall be guaranteed for five years, and shall be suspended if the employee is gainfully employed, or recovers from his permanent total disability, or fails to present himself for examination at least once a year upon notice by the System, except at otherwise provided for in other laws, decrees, orders or Letters of Instructions. (As amended by Sec. 5, P.D. 1641).
(c) The following disabilities shall be deemed total and permanent:chanroblesvirtuallawlibrary
1. Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided for in the Rules;(d) The number of months of paid coverage shall be defined and approximated by a formula to be approved by the Commission.
Art. 193. Permanent partial disability. — (a) Under such regulations as the Commission may approve, any employee under this Title who contracts sickness or sustains an injury resulting in permanent partial disability shall for each month not exceeding the period designated herein be paid by the System during such a disability an income benefit equivalent to the income benefit for permanent total disability.
(b) The benefit
shall be paid for not more than the period designated in the following
(c) A loss of a wrist shall be considered as a loss of the hand, and a loss of an elbow shall be considered as a loss of the arm. A loss of an ankle shall be considered as a loss of the foot, and a loss of a knee shall be considered as a loss of the leg. A loss of more than one joint shall be considered as a loss of the whole finger or toe, and a loss of only the first joint shall be considered as a loss of one-half of the whole finger or toe: Provided, That such a loss shall be either the functional loss of the use or physical loss of the member. (As amended by Sec. 7, P.D. 1368).
(d) In case of permanent partial disability less than the total loss of the member specified in the preceding paragraph, the same monthly income benefit shall be paid for a portion of the period established for the total loss of the member in accordance with the proportion that the partial loss bears to the total loss. If the result is a decimal fraction, the same shall be rounded off to the next higher integer. chan robles virtual law library
(e) In cases of simultaneous loss of more than one member or a part thereof as specified in this Article, the same monthly income benefit shall be paid for a period equivalent to the sum of the periods established for the loss of the member or a part thereof. If the result is a decimal fraction, the same shall be rounded off to the next higher integer.
(f) In cases of injuries or illnesses resulting in a permanent partial disability not listed in the preceding schedule, the benefit shall be an income benefit equivalent to the percentage of the permanent loss of the capacity for work. (As added by Sec. 7, P.D. 1368).
(g) Under such regulations as the Commission may approve, the income benefit payable in case of permanent partial disability may be paid in monthly pension or in lump sum if the period covered does not exceed one year. (As added by Sec. 7, P.D. 1368).
(b) Under such regulations as the Commission may approve, the system shall pay to the primary beneficiaries upon the death of a covered employee who is under permanent total disability under this Title, eighty percent of the monthly income benefit and his dependents to the dependents' pension; Provided, That the marriage must have been validly subsisting at the time of disability: Provided, Further, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries the monthly pension excluding the dependents' pension, of the remaining balance of the five-year guaranteed period: Provided, Finally, that the minimum death benefit shall not be less than fifteen thousand pesos. (As amended by Sec. 4, P.D. 1921).
(c) The monthly income benefit provided herein shall be the new amount of the monthly income benefit for the surviving beneficiaries upon the approval of this decree. (As amended by Sec. 8, P.D. 1386).
(d) Funeral Benefit. - A funeral benefit of Three Thousand Pesos (P3,000.00) shall be paid upon the death of a covered employee or permanently totally disabled pensioner." (As amended by Sec. 3, E. O. 179). [ECC Resolution No. 92-07-0032, dated July 8, 1992 increased the funeral benefit for private sector to eight thousand pesos (P8,000) effective May 1, 1992].
PROVISIONS COMMON TO INCOME BENEFITS
Art. 196. Delinquent contributions. - (a) An employer who is delinquent in his contributions shall be liable to the System for the benefits which may have been paid by the System to his employees or their dependents, and any benefit and expenses to which such employer is liable shall constitute a lien on all his property, real or personal which is hereby declared to be preferred to any credit, except taxes. The payment by the employer of the lump sum equivalent of such liability shall absolve him from the payment of the delinquent contributions and penalty thereon with respect to the employee concerned.
(b) Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the employee or his dependents to the benefits under this Title. If the sickness, injury, disability or death occurs before the System receives any report of the name of his employee, the employer shall be liable to the System for the lump sum equivalent to the benefits to which such employee or his dependents may be entitled.
Art. 197. Second injuries. - If any employee under permanent partial disability suffers another injury which results in a compensable disability greater than the previous injury, the State Insurance Fund shall be liable for the income benefit of the new disability: Provided, That if the new disability is related to the previous disability, the System shall be liable only for the difference in income benefits. chan robles virtual law library
Art. 198. Assignment of benefits. - No claim for compensation under this Title is transferable, or liable to tax, attachment, garnishment, levy or seizure by or under any legal process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the employee to the System.
Art. 199. Earned benefits. - Income benefits shall, with respect to any period of disability, be payable in accordance with this Title to an employee who is entitled to receive wages, salaries or allowance for holidays, vacation or sick leaves, and any award of benefit under a collective bargaining or other agreement.
Art. 200. Safety devices. - In case the employee's injury or death was due to the failure of the employer to comply with any law, or to install and maintain safety devices, or take other precautions for the prevention of injury, said employer shall pay to the State Insurance Fund a penalty of twenty-five percent of the lump sum equivalent of the income benefit payable by the System to the employee. All employers, especially those who should have been paying a rate of contribution higher than required of them under this Title, are enjoined to undertake and strengthen measures for the occupational health and safety of their employee.
Art. 201. Prescriptive period. - No claim for compensation shall be given due course unless said claim filed with the system within three years from the time the cause of action accrued. (As emended by Sec. 5, P.D. 1921.)
Art. 202. Erroneous payment. - (a) If the System in good faith pays income benefit to a dependent who is inferior in right to another dependent or with whom another dependent is entitled to share, such payments shall discharge the System from liability, unless and until such other dependent notifies the System of his claim prior to the payments.
(b) In case of doubt as to the respective rights of rival claimants, the System is hereby empowered to determine as to whom payments should be made in accordance with such regulations as the commission may approve. If the money is payable to a minor or incompetent, payment shall be made by the System to such person or persons as it may consider to be best qualified to take care and dispose of the minor's or incompetent's property for his benefit.
Art. 203. Prohibition. - No agent, attorney or other person pursuing or in charge of the preparation or filing of any claim for benefit under this Title shall demand or charge for his services any fee, and any stipulation to the contrary shall be null and void. The retention or deduction of any amount from any benefit granted under this Title for the payment of fees of such services is prohibited. Violation of any provision of this Article shall be punished by a fine of not less than five hundred pesos nor more than five thousand pesos, or imprisonment for not less than six months nor more than one year, or both, at the discretion of the court.
Art. 204. Exemption from levy, tax, etc. - All laws to the contrary notwithstanding, the State Insurance Fund and all its assets shall be exempt from any tax, fee, charge, levy, or customs or import duty, and no law hereafter enacted shall apply to the State Insurance Fund unless it is provided therein that the same is applicable by expressly stating its name.
RECORDS, REPORTS AND PENAL PROVISIONS
(b) All entries in the employer's logbook shall be made by the employer or any of his authorized official after verification of the contingencies or the employee's absences for a period of a day or more. Upon request by the System, the employer shall furnish the necessary certificate regarding information about any contingency appearing in the logbook, citing the entry number, page number and date. Such logbook shall be made available for inspection to the duly authorized representative of the System. chan robles virtual law library
(c) Should any employer fail to record in the logbook and actual sickness, injury or death of any of his employees within the period prescribed herein, give false information or withhold material information already in his possession, he shall be held liable for fifty percent of the lump sum equivalent of the income benefit to which the employee may be found to be entitled, the payment of which shall accrue to the State Insurance Fund.
(d) In case of payment of benefits for any claim which is later determined to be fraudulent and the employer is found to be a party to the fraud, such employer shall reimburse the system the full amount of the compensation paid.
Art. 206. Notice of sickness, injury or death. - Notice of sickness, injury or death shall be given to the employer by the employee or by his dependents or anybody on his behalf within five days from the occurrence of the contingency. No notice to the employer shall be required if the contingency is known to the employer or his agents or representatives.
Art. 207. Penal provisions. - (a) the penal provisions of Republic Act numbered eleven hundred sixty-one, as amended, and Commonwealth Act numbered one hundred eighty-six, as amended, with regard to the funds as are thereunder being paid to, collected or disbursed by the System, shall be applicable to the collection, administration and disbursement of the funds under this Title. The penal provisions on coverage shall also be applicable.
(b) Any person, who for the purpose of securing entitlement to any benefit or payment under this Title or the issuance of any certificate or document for any purpose connected with this Title, whether for him or for some other person, commits fraud, collusion, falsification, misrepresentation of facts or any other kind of anomaly shall be punished with a fine of not less than five hundred pesos nor more than five thousand pesos and an imprisonment for not less than six months nor more than one year, at the discretion of the court.
(c) If the act penalized by this Article is committed by any person who has been or is employed by the Commission or system, or a recidivist, the imprisonment shall not be less than one year; if committed by a lawyer, physician or other professional, he shall in addition to the penalty prescribed herein be disqualified from the practice of his profession; and if committed by any official, employee or personnel of the Commission, System or any government agency, he shall in addition to the penalty prescribed herein be dismissed with prejudice to re-employment in the government service.
Art. 208. Applicability. - This Title shall apply only to injury, sickness, disability or death occurring on or after January 1, 1975.
Art. 208-A. Repeal of Laws. - All existing laws, Presidential Decrees and Letter of Instruction which are inconsistent with or contrary to this Decree, are hereby repealed: Provided, that in the case of the GSIS, conditions for entitlement to benefits shall be governed by the Labor Code, as amended: Provided, However, that the formulas for computation of benefits, as well as the contribution base, shall be those provided for under Commonwealth Act numbered one hundred eighty-six, as amended by Presidential Decree No. 1146, plus twenty percent thereof. (As amended by Sec. 7, P.D. 1641).
SECTION 2. Title III of Book IV on Medicare of the same Code is hereby amended to read as follows:chanroblesvirtuallawlibrary
Art. 209. Medical care. - The Philippine Medical Care Plan shall be implemented as provided under Republic Act numbered sixty-one hundred eleven, as amended.
SECTION 3. Article 292 of Title II of Book VII on Prescription of Offenses and Claims of the same Code is hereby amended to read as follows:chanroblesvirtuallawlibrary
Art. 292. Money claims. - All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise, they shall be forever barred.
All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this Code within one year from the date of such effectivity, and shall be processed or determined in accordance with the implementing rules and regulations of the Code; otherwise, they shall be forever barred.
Workmen's compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise they shall be forever barred. These claims shall be processed and adjudicated in accordance with the law and rules at the time their causes of action accrued. (As amended by P.D. 570-A).
SECTION 4. Article 297 of Title III of Book VII on Transitory and Final Provisions of the same Code is hereby amended to read as follows:chanroblesvirtuallawlibrary
Art. 297. Termination of the Workmen's Compensation Program. - The Bureau of Workmen's Compensation, the Workmen's Compensation Commission and the Workmen's Compensation Units in the regional offices of the Department of Labor shall continue to exercise the functions and the respective jurisdictions over workmen's compensation cases vested upon them by Act No. 3428 as amended, otherwise known as the Workmen's Compensation Act, until March 31, 1976. Likewise, the term of office of incumbent members of the Workmen's Compensation Commission, including its chairman and any commissioner deemed retired as of December 31, 1975, as well as the present employees and officials of the Bureau of Workmen's Compensation, Workmen's Compensation Commission and the Workmen's Compensation Units shall continue up to that date. Thereafter, said Offices shall be abolished and all officials and personnel thereof shall be transferred to and mandatorily absorbed by the Department of Labor, subject to Presidential Decree No. 6, Letters of Instructions No. 14 and 14-A and the Civil Service Law and rules. chan robles virtual law library
Such amount as may be necessary to cover the operational expenses of the Bureau of Workmen's Compensation, the Workmen's Compensation Commission, and the Workmen's Compensation Unit, including the salaries of incumbent personnel for the period up to March 31, 1976 shall be appropriated from the unprogrammed funds of the Department of Labor. (As amended by P.D. 570-A and Sec. 1, P.D. 865-A).
SECTION 5. Article 300 of Title III of Book VII on Transitory and Final Provisions of the same Code is hereby amended to read as follows:chanroblesvirtuallawlibrary
Art. 300. Disposition of pending cases. - All cases pending before the Court of Industrial Relations and the National Labor Relations Commission established under Presidential Decree No. 21 on the date of effectivity of this Code shall be transferred to and processed by the corresponding labor relations division or the National Labor Relations Commission created under this Code having cognizance of the same in accordance with the procedure laid down herein and its implementing rules and regulations. Cases on labor relations on appeal with the Secretary of Labor or the Office of the President of the Philippines as of the date of effectivity of this Code shall remain under their respective jurisdictions and shall be decided in accordance with the law, rules and regulations in force at the time of appeal.
All workmen's compensation cases pending before the Workmen's Compensation Units in the regional offices of the Department of Labor and those pending before the Workmen's Compensation Commission as of March 31, 1975, shall be processed and adjudicated in accordance with the law, rules and procedure existing prior to the effectivity of the Employees' Compensation and State Insurance Fund. (As amended by P.D. 570-A).
SECTION 6. The numbers of the Articles of the same Code shall be amended by renumbering them consecutively beginning with Art. 1.
SECTION 7. This Decree shall take effect on January 1, 1975.
Done in the City of Manila, this 27th day of December, in the year of Our Lord, Nineteen Hundred Seventy Four.
D. 570-A took effect on November 1, 1974.